Global Trustee and Fiduciary Services Bite-Sized Issue 7 2024
CBDC Collaboration between BDF and HKMA Unlocks NewCBDC Cross-border Opportunities On 27 June 2024, the Banque de France (BDF) and the Hong Kong Monetary Authority (HKMA) announced their collaboration relating to wholesale central bank digital currency (CBDC). The BDF and the HKMA have been maintaining a close partnership in promoting financial innovation. The latest collaboration is the HKMA’s participation in Wave 2 of the European Central Bank (ECB)’s Eurosystem exploratory work, marking an important milestone as a major central banking institution outside the Eurosystem participating in the initiative. The two central banking institutions will delve into the study of interoperability between their wholesale CBDC infrastructure, i.e., the BDF’s DL3S and the HKMA’s Project Ensemble Sandbox, with the focus on real-time cross-border and cross-currency payments. The cross-border experiment aims to explore how to optimise settlement efficiency of cross-border transactions and facilitate interoperability between financial market infrastructures in different jurisdictions. Link to HKMA Press Release here Project mBridge Reaches MinimumViable Product Stage On 5 June 2024, the Bank for International Settlements (BIS) announced that Project mBridge continues its development and has reached the minimum viable product (MVP) stage, while broadening its international reach. BIS says that the project aims to explore a multi-CBDC platform shared among participating central banks and commercial banks, built on distributed ledger technology (DLT) to enable instant cross-border payments and settlement. The project aims to tackle some of the key inefficiencies in cross-border payments, including high costs, low speed, and operational complexities. It also addresses financial inclusion concerns, particularly in jurisdictions where correspondent banking has been in retreat, causing additional costs and delays. Multi-CBDC arrangements that connect different jurisdictions in a single common technical infrastructure offer significant potential to improve the current system and allow cross-border payments to be immediate, cheap and universally accessible with final settlement. As it enters the MVP stage, BIS says that Project mBridge is now inviting private sector firms to propose new solutions and use cases that help develop the platform and showcase all its potential. Link to BIS Announcement here Securities Services Bite-Sized Global Trustee and Fiduciary Services QUICK LINKS Issue 7 | 2024 CBDC CYBERSECURITY DIVERSITY DORA FINTECH IOSCO MICA OPERATIONAL RESILIENCE PRIIPS RETAIL INVESTMENT PACKAGE SUSTAINABLE FINANCE/ ESG T+1 TOKENISATION ASIA EUROPE LUXEMBOURG NORTH AMERICA UNITED KINGDOM
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